‘There’s a big financial problem’: Scrutiny intensifies over Texas electricity pricing during winter storm

State

AUSTIN (Nexstar) — With the bill-filing deadline looming Friday, the rush is on to ensure state lawmakers can come up with promised fixes following the deadly winter storm that left millions without power and water last month.

One of the key short-term complications is who’ll pay the price for the high electricity costs set by the manager of the Texas power grid during and after the storm.

An independent market monitor hired by the state determined the Electric Reliability Council of Texas (ERCOT) allowed emergency pricing to continue for more than 30 hours after ERCOT recalled its instructions for utilities to shed load. The monitor recommended ERCOT correct the real-time pricing for Feb. 18 and part of Feb. 19 “to remove the inappropriate pricing intervention” that occurred.

The chair of the Public Utility Commission of Texas, which has authority over ERCOT, said Friday he was reluctant to go back and reprice the electricity.

“You don’t know who you’re hurting,” Commissioner Arthur D’Andrea said in Friday’s PUC meeting. “You think you’re protecting the consumer, and it turns out you’re, you know, you’re bankrupting a co-op or a city. And so it’s dangerous to do so, you know, after something is run to go around and redo it.”

D’Andrea is the lone PUC commissioner after the resignations of chair DeAnn Walker last week and Commissioner Shelly Botkin on Monday.

“I totally get how it looks like you’re protecting consumers,” D’Andrea said Friday, while Botkin was still a commissioner. “But, I promise you — you’re not — and if you don’t believe me, you know, call around, and you’ll see.”

It’s the post-storm pricing that has lawmakers concerned.

Adding to his list of emergency items for the legislature, Gov. Greg Abbott on Tuesday night tacked on a priority for legislation relating to “the correction of any billing errors” by ERCOT, including “any inaccurate excessive charges and any issues regarding ancillary service prices.”

Lt. Gov. Dan Patrick urged the PUC and ERCOT to “correct the errors” found by the market monitor. A group of 28 Texas Senators wrote to D’Andrea on Tuesday calling on the PUC to “immediately correct the billing errors related to last month’s winter storm.”

“Let’s just double check everything, let’s just be sure there weren’t any errors made, that the bills were accurate and proper, based on how the grid is constructed,” State Sen. Dawn Buckingham, R-Lakeway, said.

“We want to be sure that folks aren’t having to pay bills that occurred out of an error in billing,” Buckingham said.

Other supporters of repricing, like the Rayburn Country Electric Cooperative, Inc., told the PUC on Wednesday the commission should “correct the artificial financial penalty that load-serving entities incurred for acting quickly to stop the suffering of Texans and restore power as quickly as possible.” Rayburn wrote PUC inaction would lead to “financial detriment to consumers for years to come.”

Critics of repricing worry retroactively altering the costs would create long-term regulatory uncertainty.

Leaders with Austin Energy filed comments with the PUC outlining concerns that repricing would “diminish the confidence of all market participants and “would have the effect of undermining faith in the long-term viability of the ERCOT wholesale electricity market.”

House Speaker Dade Phelan, R-Beaumont, on Wednesday called repricing a “consequential step that may affect our ability to improve upon and modernize our electric grid,” signaling a more deliberative process for the state’s lower chamber.

State Sen. Nathan Johnson, D-Dallas, who signed on to the Senate letter, said “there’s a big financial problem that I think ultimately all of us are going to have to face.”

Johnson worries state leaders are running out of time in their 140-day legislative session with a bill-filing deadline approaching on Friday to successfully find solutions to the billing problems presented.

“If we’re going to do this, if there’s going to be a price correction, repricing price change, retroactive market fixing, it’s got to happen immediately,” Johnson said Wednesday.

While conversations continue on legislative fixes to other aspects of winter storm accountability like weatherization of equipment and market reforms, Johnson said addressing the short term needs like the $16 billion financial fiasco ERCOT is facing must be dealt with by state lawmakers.

“On this one issue, yeah, it’s probably pretty timely for the legislature to act,” Johnson said.

An ERCOT spokesperson declined to comment. ERCOT’s board of directors are expected to address financial matters during a Friday meeting.

“The Public Utility Commission of Texas is working closely with the Legislature to discern the factors that collided with the winter storm to cause the grid event and accompanying financial impact,” PUC’s director of external affairs Andrew Barlow said in an emailed statement.

Chairman D’Andrea is expected to address the House State Affairs Committee on this issue Thursday morning. The Senate Jurisprudence Committee has also scheduled a Thursday morning hearing to discuss the billing issue.

PUC’s meeting scheduled for Thursday was cancelled. The commission is scheduled to have an open meeting on Friday.

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